J aakko Kotiranta

Preparing for ERP Implementation

Case: Enersize Oy
Helsinki Metropolia University of Applied Sciences
Bachelor of Business Administratoin
International Business and Logistics
Bachelors Thesis
April 2012
Abstract


Author(s)
Title

Number of Pages
Date
J aakko Kotiranta
Preparing for ERP Implementation
Case: Enersize Oy

57 pages + 2 appendices
April 2012
Degree Bachelor of Business Administration
Degree Programme Business Administration
Specialisation option International Business and Logistics
I nstructor(s)

Kaija Haapasalo, Lecturer

This thesis studied enterprise resource planning (ERP) systems and ERP implementation
projects. The thesis is comprised of a theoretical part and a case study. The case study
concentrates on the initial stages of an ERP implementation project in a Finnish start-up
company Enersize Oy.

The purpose of this thesis is to provide information on ERP systems and ERP implementa-
tion projects. The case study provides a practical aspect on an ERP implementation project
in a small company.

This study was conducted using qualitative research methods. The primary source of in-
formation for the theoretical part was a thorough search through the extensive literature
on the subject. The main methods used for obtaining information in the case study re-
search were observing the work at the case company and conducting qualitative inter-
views on Enersize Personnel.

ERP systems are getting more and more important for modern companies as the competi-
tion is fierce on many sectors and concentration on core competencies is leading to wide
partner networks. In this kind of business environment, managing business information is
very important for companies competitiveness. By using ERP systems companies can
manage and utilize information efficiently. For the aforementioned reasons ERP implemen-
tations are getting more common also among small and medium-sized enterprises (SME)
and many ERP vendors are now providing ERP systems that are developed for SMEs
needs.

In the case study, the ERP requirements of the case company were defined and an ERP
system that fills those requirements was proposed for implementation. Also other tasks
related to initial stages of an ERP implementation project were carried out and recorded.

Keywords ERP, ERP Implementation, SME, Start-up, Enersize Oy




Contents

1 Introduction 1
1.1 Objectives and Scope of the Thesis 1
1.2 Research Methodology 3
1.3 The Case Company 4
2 Enterprise Resource Planning Systems 6
2.1 The History of ERP 7
2.2 ERP Function and Benefits 11
2.3 ERP Disadvantages 14
3 ERP Implementation Project 17
3.1 Phases in ERP Implementation Project 18
3.2 Risks in ERP Implementation Project 20
3.3 Controlling the Risks 22
4 The Enersize Case 25
4.1 Carrying Out the Case Study 25
4.2 ERP Implementation J ustification 26
4.3 Analysis of the Present State 28
4.3.1 Sales Process 29
4.3.2 Project Management 30
4.3.3 Financial Management 31
4.3.4 Logistics 31
4.3.5 Working Environment and Communication 32
4.4 Risk Analysis of Enersizes ERP Project 33
4.4.1 Risks of ERP System Selection 34
4.4.2 Risks of ERP I mplementation 37
4.4.3 Risks of ERP Usage 40
4.5 Requirements for the ERP System 43
4.5.1 General Requirements 43
4.5.2 Users, Locations, and Integrations 45
4.5.3 Process Requirements 46
4.6 ERP System proposition 51
5 Conclusions 54


References 56
Appendices
Appendix 1. Frame for Interviews
Appendix 2. Timetable for the ERP Implementation Project
1

1 I ntroduction

The background for this thesis is the researchers work placement at Enersize Oy. The
intended tasks for the internship included planning and rationalizing the logistic pro-
cesses of the company. While discussing the specifics of the work placement, Ener-
sizes need for an Enterprise Resource Planning (ERP) system was brought up. It was
decided together with the CEO Tuomas Rouhikko that the subject of the thesis should
be the determination of Enersizes requirements for an ERP system and the search of a
suitable ERP solution for the company.

The business environment in most industries is becoming more complex and interna-
tional, which means that managing and utilizing information effectively is very im-
portant for the success of modern companies. Concentration on core competencies and
outsourcing other activities are leading to wider partner and subcontractor networks
and often to internationalization. Managing the whole operation throughout the net-
work requires information systems that can integrate both external and internal infor-
mation into readily available and usable forms. Many companies are using information
technology solutions, such as ERP systems, to manage their business processes and to
integrate all the different operations in order to enhance information flow within the
company as well as collaboration with partners, suppliers and customers.

For the reasons mentioned above, implementation of an ERP system is considered very
important for Enersizes competitiveness. Selecting and implementing a suitable ERP
system is a very challenging task, especially for small and medium-sized enterprises
(SMEs), and not least because of the high costs involved in the process. However,
more and more SMEs are going through with the task because of the potential benefits
that ERP systems can bring. Also many ERP vendors have realized the potential in SME
markets and launched new products that are designed for smaller companies.

1.1 Objectives and Scope of the Thesis

The goals of this thesis include providing general level information on ERP systems and
their problem-prone implementation projects by researching the literature and previous
2

studies on the subject. Another goal is to carry out the definition of Enersizes enter-
prise resource planning requirements by examining the current state of the company
and considering the future needs. Surveying and comparing the different system op-
tions available in the market in order to propose a suitable ERP solution for the com-
pany is also included into the goals of the thesis. Therefore, the main goals of this re-
search work can be further divided into three objectives.

- The first objective is to provide a theoretical background for the subject matter
of the thesis.
- The second objective is to define the requirements for Enersizes ERP system
and to determine the functionalities that need to be included in the software.
- The third objective is to find an ERP system that would best suit the needs, re-
quirements, and resources of Enersize.

This thesis consists of two parts: a theoretical part and a case study. The first part,
which is the theoretical part, aims to provide an insight into the subject matter, i.e.,
ERP systems and ERP implementation projects. The purpose of the theoretical part is
to explain the function, history, benefits and disadvantages of ERP systems. The first
part also covers ERP implementation projects on a general level.

The second part of the thesis, the case study, is a part of the ERP system implementa-
tion project for Enersize Ltd. The purpose of the case study is to help Enersize in its
ERP implementation project by planning, carrying out and documenting the necessary
tasks in the early stages of the ERP implementation project. This study is confined to
cover Enersizes implementation project up to the final selection of the ERP product
and its vendor and therefore it does not cover the actual deployment stage.

This thesis aims to provide useful general level information on enterprise resource
planning and despite focusing solely on the case company, the case study can be help-
ful in gaining a general understanding of ERP implementation projects in SMEs and
start-up companies. The thesis is beneficial for the case company itself, because the
research will contribute significantly to Enersizes ERP implementation project. It can
also be advantageous for other SMEs or startup companies who are undertaking the
same project.
3

1.2 Research Methodology

This research is conducted using qualitative research methods. The objective of quali-
tative research is to gain an in-depth understanding of certain behavior and the rea-
sons behind such behavior. Instead of focusing only on what decisions are made, qual-
itative research examines why and how they are made. (Glenn 2010: 95) This thesis
consists of a theoretical part and a case study. Therefore the research has characteris-
tics of both empirical and theoretical study. The theoretical part focuses on explaining
the theory behind ERP systems and ERP implementation projects in order to provide
deeper insight into the subject matter of the case study.

The primary research method for the theoretical part of the thesis was thorough
search through literature on the subject. A lot of previous research has been done on
the subject and as a consequence, a vast amount of relevant literature is available.
The sources that were used in literature research were mainly obtained from Metropo-
lias libraries and electronic databases.

According to Woodside (2010), a case study research is an inquiry that focuses on de-
scribing, understanding, predicting, and/or controlling the individual. In this context
the word individual does not necessarily mean a person, but can mean different
things (such as: process, animal, person, group, household, organization, culture, in-
dustry, or nationality) depending on the study. The case study part of the thesis focus-
es on the case company, Enersize Oy, and aims to fulfill the goals and objectives of the
research by completing and documenting the first stages of Enersizes ERP implemen-
tation project.

The main methods used for obtaining information in the case study research were ob-
serving the work at the case company and conducting qualitative interviews on Ener-
size personnel. Because the researcher was working for the case company during the
research, a lot of information could be obtained by participating the meetings and dis-
cussions regarding the ERP implementation. To gain an understanding of Enersizes
business processes, in order to find out its ERP requirements and needs, several un-
structured interviews with the workers of Enersize were carried out.
4


1.3 The Case Company

Enersize Oy is a technology company that provides comprehensive energy saving solu-
tions for process industry. Enersize was established in February 2010 as a spinoff from
Rocca Group Oy. Rocca Group is an importer and seller of compressed air equipment
and systems. Compressed air is an important energy utility for process industry and it
is used basically in every production plant in the world. Inefficient compressed air sys-
tems waste huge amounts of energy globally every year. The potential for energy effi-
ciency improvement in compressed air processes was realized in Rocca Groups busi-
ness environment and that was the starting point of Enersize Oy. Due to this back-
ground, Enersizes energy saving solution was mainly focused on compressed air sys-
tems in the beginning, however, the same concept can be utilized in other process
industry support processes as well. For this reason Enersize is now providing energy
saving solutions also on pumps, fans conveyors and other energy consuming process-
es.

Enersize has created a complete technology called Enersize Platform for monitoring
energy efficiency in industrial processes. The Platform is a tool for collecting infor-
mation on energy consumption and for presenting that information in understandable
and usable form. Enersizes Platform solution gives a better understanding of how a
production process consumes energy and how process quantities and energy are tied
together. This information makes energy usage transparent and significantly helps op-
timizing that usage.

The Platform consists of two elements: Enersize Gateways and Enersize Cloud software
service. The Gateway is a data collection unit that gathers information from sensors,
analyzers and transmitters. Gateway units need to be installed in the customers prem-
ises according to the mapping of the surveillance points and machines that the cus-
tomers want monitored. Gateways are easy to install by using standard industrial ca-
bles and they are not tied to any specific industry field so they can also be connected
to previously installed existing meters. The gathered information is then sent to Ener-
size Cloud through which it can be accessed by the end user. Enersize Cloud is a pro-
prietary software that utilizes cloud computing technology. The Cloud can be accessed
5

from anywhere in the world with any device with a web browser. Through the Cloud
the customer can process and analyze the measurement information and view tailored
reports and charts for example. The principle of Enersize Platform is illustrated in figu-
re 1.


Figure 1. The Enersize Platform.


Enersize sells the energy saving solutions in two different kinds of forms. One option
for customers is to purchase the Platform only, in which case the measuring system is
installed in the customers facility to monitor the processes that are wanted to be opti-
mized. After the installation, the customer gets access to the Enersize Cloud software
where the energy consumption can be monitored and Enersize offers consultancy on
how the energy efficiency can be enhanced. The other option is to purchase a com-
plete energy saving service called ESaaS (Energy Saving as a Service). ESaaS also uti-
lizes the Platform but this service includes Enersize carrying out all the necessary
changes that are needed in order to achieve savings on energy consumption. ESaaS
service is sold with a no savings - no costs guarantee, which means that the achieved
savings are divided between the customer and Enersize according to the contract and
if there are no savings achieved there will be no costs for the customer.
6


2 Enterprise Resource Planning Systems

Enterprise Resource Planning (ERP) systems are business software tools that allow
companies to automate business processes, share data and practices across the enter-
prise, and produce and access real-time information (Sumner 2005: 3). The main ob-
jective of ERP systems is to integrate all departments and functional information flows
across an enterprise onto a single computer system that serves all of the companys
needs (Turban and Volonino 2010: 380). ERP systems are widely used by organizations
of all sizes and functions because their potential benefits are too significant to disre-
gard. In order to be competitive in modern business environment, organizations must
establish good business practices and effectively share information internally, as well
as with their suppliers, partners and customers.

The benefits that an ERP system can bring to organizations, stem from the systems
ability to overcome the inefficiencies of independent information systems. For example,
compared to stand-alone information systems, an ERP system:

- Supports coordination across business functions
- Integrates data
- Gives access to consistent real-time information
- Enables uniform information system maintenance
- Supports consistent business processes. (Sumner 2005: 3-5)

By integrating all the information flows, ERP systems help organizations manage the
supply chain, inventory, customer orders, production planning, receiving, shipping,
accounting, human resources and other business functions (Sumner 2005: 3). An in-
formation system that enhances the planning and implementation of business process-
es can save costs and time, improve resource allocation and enhance customer ser-
vice. Therefore ERP systems can have a significant impact on the profitability and
competitiveness of companies.(Kouri and Vilpola 2006: 7)

Most ERP systems consist of separate modules that support different functional areas.
Modules for such areas as customer relationship management, financial accounting,
7

supply chain management, and human resources are integrated together and they
access the same data from central database. Companies implementing ERP solutions
can choose which modules they want to implement according to their needs, and the
modularity of the systems gives them the opportunity to start using only parts of the
ERP alongside other systems in order to save costs. The total implementation of a
vendor ERP system is costly and time consuming but offers the benefits of total inte-
gration of data across multiple functional areas of the business. (Sumner 2005: 7-9)


Figure 2. Information integration through ERP systems (Train-Srv, 2012).


2.1 The History of ERP

Enterprise Resource Planning is not a new concept in the business world. The functions
that ERP systems perform are basically the same business functions that organizations
have performed for decades. The advances in computerization and networking have
allowed the emergence of computer-based ERP systems as we know them today.
(Dowlatshahi: 2005)
8


The History of the ERP systems can be traced back to the 1960s when the develop-
ment of computer software for inventory management purposes started. The devel-
opment was done by the user companies themselves or software companies that were
specialized in tailoring computer programs. (Kettunen and Simons 2001: 46) Most of
the business software packages were limited to only inventory control functionalities
back then. These systems were reorder point systems that were designed to manage
high-volume production of small number of products with a constant demand. They
used historical data to forecast inventory demand by automating inventory replenish-
ments when a stock item fell below predetermined level. (Sumner 2005: 3)

The next generation of business software were Materials Requirement Planning (MRP)
systems which were introduced in the early 1970s. MRP systems were focused on de-
mand-based planning of production and inventory control and the purpose was to
guide purchasing activity and to automate the creation of purchase orders. MRPs at-
tempted to minimize inventory levels while ensuring adequate materials for the pro-
duction process. These software included master production schedule and a bill of ma-
terials file. Master production schedule is one of the primary inputs in MRP and it states
which items are to be produced, as well as when and in what quantities they are
needed. Bill of materials (BOM) file is the list of materials required to produce each
item. MRPs emphasized production planning and integration and were later enhanced
with tools for sales planning, customer order processing, and rough-cut capacity plan-
ning. In the end of the decade the development of commercial standardized business
software became more common and all the systems were not tailored for the needs of
a particular company anymore. The planning of required materials for production in
todays ERP systems is still handled with similar MRP logic. Figure 3 illustrates the MRP
function. (Sumner 2005: 3; Kettunen and Simons 2001: 46; BN.Tafe 2005)

9


Figure 3. The function of MRP software (BN. Tafe 2005).


Manufacturing Resource Planning (MRP-II) systems emerged in the 1980s. MRP-II
concept was based on the MRP systems but new features were added. The focus of
these systems was on quality and they had the ability to schedule and monitor the
implementation of production plans. Later on, MRP-II systems focus shifted more to-
wards fulfilling customer needs and the ability to adapt production schedules to meet
specific customer needs on timely basis was included in the software. I n the early
1990s, MRP-II systems were leading the way towards integrated business systems by
including software for other departments in addition to production. Software for finan-
cial accounting, project management and human resource management among others
were integrated with MRP concepts. This led to the development of ERP concept as we
know it today. By the late 1990s ERP systems integrated all the information flows with-
in the company and the ideas of e-business and increased information sharing be-
tween companies information systems were incorporated in the ERP concept. (Sumner
2005: 3; Kettunen and Simons 2001: 46-48)

10

While business software were initially designed for manufacturing companies, the use
of ERP systems is not limited to certain types of industries or organizations and today
all kinds of companies are using ERP systems. Service organizations are utilizing ERP
software to improve their efficiency and decision-making. Manufacturing companies
continue to use ERPs but are now relying more on them for handling the whole pro-
cess associated with a customer order from start to finish. Modern ERP systems can
perform a wide range of functions and operations for different departments, wether it
is small, medium or large organization. (Dowlatshahi 2005) As already mentioned in
the introduction, companies today are increasingly concentrating on their core func-
tions and therefore forming collaboration networks with other organizations. As com-
panies are forming networks, in order to optimize their operations, the need for inte-
grations between different information systems grow. Nowadays ERP systems are re-
quired to help controlling business networks. Figure 4 illustrates how business software
and their functionalities have evolved.


Figure 4. ERP history and the evolution of ERP functionalities (Kettunen and Simons 2001: p47
11

2.2 ERP Function and Benefits

Enterprise resource planning systems are expensive investments that are often associ-
ated with many problems. There are numerous stories about failed ERP implementa-
tions and complex systems that are difficult to use. Despite the dubious reputation of
the systems, they are widely used. In this section of the text, ERP systems role in an
organization and the common benefits that it can bring, are discussed.

According to Statistics Finland (2011), 75 % of Finnish companies, that employ more
than 100 people, are using ERP systems. The usage rate is 56 % even amongst com-
panies with 50-99 employees. These figures suggest that using an ERP must be bene-
ficial for companies. Below is a list of common ERP benefits from a business stand-
point.

- Time and cost reduction of business processes
- Faster transaction processing using common data
- Improved operational performance (e.g. reductions in excess inventory and ac-
counts receivable)
- Enhanced supply chain management (linkages with suppliers and customers)
- Consistent business processes conforming best practices
- Improved financial management and customer service
- Enhanced organizational communications (e.g. with customers and suppliers)
- Improved e-business with web-based interfaces
- Improved availability of information for planning and control (Sumner 2005: 4-
5)

I t needs to be emphasized that an ERP system is only as efficient as its users allow it
to be. In other words, the success of an ERP system is completely dependable on how
the workers utilize it. Even the best systems will not be beneficial without timely input
of accurate information by their users. (Exforsys 2009)

An ERP system can be advantageous for an organization in numerous ways. All of the
benefits are not easy to associate with the system because ERPs can increase profits
and cut costs in ways that are difficult to measure. Some advantages can also emerge
a long time after the initial implementation, and therefore are impossible to notice in
12

the short run. (Vuorenp 2007) Figure 5 illustrates the effects of an ERP implementa-
tion on organizational performance. As can be seen in the figure 5, the performance of
an organization tends to decline during the implementation. This decline is due to diffi-
culties that employees often have in adopting the new system and new ways of busi-
ness processing. The implementation project will also cause distractions to employees,
who still need to perform their daily tasks while participating in the project. The decline
of the organizational performance is only a temporary phase and if the new system is
properly utilized, the organization can quickly become more efficient than before the
ERP implementation.


1: Before ERP implementation 2 & 3: During implementation
4: After implementation, during training 5: After training and going live completely

Figure 5. The performance of an organization before, during and after ERP implementation.
(Parthasarthy 2007: 42)

Perhaps the most important advantage of an ERP system is the integration of infor-
mation throughout the supply chain, which can result in improved operating perfor-
mance, cost reduction and inventory reduction (Sumner 2005: 4). For example, inven-
tory management is improved by order entry that allows immediate access to invento-
13

ry, product data, customer credit history and prior order history. This kind of availabil-
ity of information makes it easier to optimize production schedules and inventory lev-
els, raises productivity, and increases customer satisfaction. (Turban and Volonino
2010: 380) Some of the benefits brought by improved visibility of organizational infor-
mation can be difficult to measure exactly, but it makes planning, forecasting and deci-
sion making easier and improves control over all the operations. Access to real-time
information also enables companies to response to changes in market conditions and
customer needs more quickly. (Sumner 2005: 4-6)

By integrating information, a properly functioning ERP system overcomes the problems
generated by working with information systems that do not communicate with each
other (Turban and Volonino 2010: 380). ERP systems support the coordination be-
tween different business functions and the data has the same meaning across the en-
terprise, whereas with non-integrated systems the data might have different definitions
for different departments. With ERP solution, the data need to be imported to the sys-
tem only once, after which it is available for everyone with access to the system. This
reduces useless manual work of inputting the same data several times. (Sumner 2005:
4-6) Although ERP systems are often associated with high costs, one benefit that
stems from using an ERP is lower information technology maintenance costs and pos-
sibly even lower license fees compared to using multiple separate systems. I t is costly,
time consuming and troublesome to maintain separate systems on a piecemeal basis
and the yearly license fees can end up being very high, even though the fee for each
individual system is relatively low. (Sumner 2005: 3-7)

The main reason why companies exist in the first place is to make profit. Naturally,
when an organization makes a major investment like implementing an ERP system,
they are interested in making more profits through the system. As we know, profits
can only be increased by reducing costs or increasing revenues. The major contribution
of an ERP system is improved information quality in various aspects such as availabil-
ity, accessibility, accuracy, and timeliness. The improved quality of information affects
the decision making processes and functional operations of a company. All of these
benefits that an ERP can bring, facilitate increases in organizational productivity which
should be transformed into more profits. Utilizing better information leads to using less
resources, like less manual labor or machine hours, and raises revenues by accurate
14

sales forecasting and better customer service which leads to increased profits. (J ipyo
2009) The figure 6 illustrates how ERP benefits can be turned into profits.



Figure 6. Realization of profits through ERP. (J ipyo 2009)


2.3 ERP Disadvantages

Although ERP systems can be very advantageous for the organizations using them, the
implementation of these systems has often proven to be problematic, as mentioned
earlier. In addition to problems regarding the ERP implementation process, there are
other disadvantages associated with ERP solutions. Probably the biggest down side to
ERP systems is the high costs of the technology (Exforsys 2009). The total costs of the
15

implementation project can be very high and more often than not, ERP projects are
late or over budget (Sumner 2005: 13). For big companies ERP adoption is always a
multimillion euro undertaking and the consulting expenses often get much higher than
the original ERP license fee (Fu, Gmeiner, Schiereck and Strahringer 2007). The costs
of ERP implementation for a small or medium-sized company are naturally lower than
for large companies, but nevertheless, the costs are substantial for any company
adopting an ERP. Even after the costly implementation, the systems are often expen-
sive to maintain. (Parthasarthy 2007: 5)

ERP systems introduce best practices, which are practices that are found to be the
best ways to perform certain processes. Although best practices can improve compa-
nies business processes, they create challenges for ERP implementation because the
system imposes processes on the companies that implement it. (Sumner 2005) The
standard processes included in ERP software replace old procedures, which very often
improve a companys operations, but sometimes these new processes replace business
procedures that were the source of competitive advantage. For example, in some in-
dustries, where competition is fierce and ERP systems are widely used, a unique old
way of doing business might allow for flexibility and differentiate a company from the
competition. In this case implementing an ERP solution could lead to loss of competi-
tive advantage. (Fu, Gmeiner, Schiereck and Strahringer 2007) The best practices of
an ERP system might also be inappropriate to the organizational culture, which leads
to culture clash and creates further problems (Parthasarthy 2007: 5).

The best practices embedded in the ERP systems mean that organizations often need
to change their practices to better fit the new system, which typically creates re-
sistance from workers. The resistance to change has been identified as a considerable
reason for the failure of information systems implementations and therefore it is an
issue that needs to be understood and managed (Hee-Woong and Kankanhalli 2009).
One of the ERP benefits is that it reduces the need for manual labor in the organiza-
tion, which is another thing that can create user resistance because some of the em-
ployees might fear being downsized due to the new system (Parthasarthy 2007: 5).

A major problem with ERP is that it is often difficult to tailor to the needs of specific
companies. Only very few companies can use ERP right out of the box and in most
16

cases it needs to be tailored to suit organizations needs. Tailoring can include both
configuring and modifying the system. Especially modification, which is done by chang-
ing the code of the software, can be tedious and very expensive. (Exforsys 2009) ERP
systems are also often seen as too rigid and difficult to adapt to specific workflow and
business processes of certain companies. In these cases, the adoption of ERP can
cause loss of flexibility and complicate the everyday work of the users. (Parthasarthy
2005: 4-6) As mentioned earlier, ERP systems are only effective if the users utilize it
properly. Many of the systems are quite complex and difficult to use without proper
training, which can be time consuming and very expensive. (Exforsys 2009)
17


3 ERP Implementation Project

The concept of implementation is traditionally related to installation of hardware and
software. In the case of ERP systems, implementation is used as a term to describe
the whole project spanning from the preliminary project planning through configuration
of the system and training until the system is in use. This, in reality, is the vendors
and consultants view on the implementation. From the companys point of view, im-
plementation means a continuous learning cycle where the organizational processes
supported by the ERP are gradually aligned with the business objectives. (Parthasarthy
2007: 35) This section of the thesis covers the different phases in the ERP implementa-
tion project as well as common risks associated with them.

ERP implementations are reputedly unsuccessful and infamous in the business world
because so many organizations have had major problems with them. It seems to be
almost an accepted fact that these projects never are on time, within the budget, and
meeting the desired business outcome (Parthasarthy 2007: 35). The failure rates of
ERP implementation projects vary from study to study, but the percentage of ERP im-
plementations that can be classified as failures ranges from 40% to 60% or even
higher. These failures have been known to result in problems as serious as organiza-
tional bankruptcy. (Chau, Davison, Scarbrough and Wong 2005). ERP implementation
is a project that includes such concepts as objectives, schedule, budget, scope, re-
sources, phases, activities, and roles just as any other project in an organization. The
most important of these concepts is objectives. An ERP implementation project is al-
ways a business development project, which aims to enhance the companys opera-
tional performance and therefore business-related goals and objectives should be set
for the project. An organization implementing an ERP system should have a clear vision
of why it is embarking on this project and what are the business objectives that it
wants to reach by utilizing the system. Careful planning can significantly affect the suc-
cess of the implementation project and the reaching of objectives. (Kouri and Vilpola
2006: 11)
18


3.1 Phases in ERP Implementation Project

Figure 7 illustrates the main phases of ERP implementation project. The phases that
are side by side in the figure can be completed in different order or they can be par-
tially overlapping.


Figure 7. The main phases in the ERP implementation project. (Kouri and Vilpola 2006: 13)


The first phase of the project is the companys decision to implement an ERP system.
This first step includes the preliminary estimation of the budget and schedule as well
as designating the management team for the project. The business objectives and
goals, that the company seeks to achieve with the ERP system, need to be determined
at this stage. The companys requirements for the ERP system should be determined in
accordance with the business objectives. When the requirements and objectives are
19

determined, ERP systems available in the market need to be compared and their func-
tionalities assessed in order to find the most optimal system for the companys needs.
Vendors and consultants of the systems should be evaluated and compared, because
the vendor often has an important role in the implementation project. (Kouri and Vilpo-
la 2006: 13-16)

When all the activities of the first phase are completed, the selection of the ERP sys-
tem and its vendor can be done. The decision concerning the selection of a system is
crucial for the whole project because, by choosing a certain ERP, the company makes
a commitment to the practices and procedures that this specific ERP system supports.
Also the decision about the vendor is very important and requires careful considera-
tion. The company needs to keep their own interests in mind and demand the best
possible service from the vendor because the whole project is challenging and big risks
are involved. (Kouri and Vilpola 2006: 13-16)

Testing and tailoring the ERP system are technical operations that are performed in
order to ensure the systems adequacy for the companys business needs. The term
tailoring, in ERP context, can have slightly different meanings in different studies or
books. In this thesis the term is used as Brehm, Heinzl and Markus use it in their 2001
article Tailoring ERP Systems, according to which, tailoring encompasses both config-
uration and modification of the software. Configuration (sometimes called customiza-
tion) refers to the setting of parameters in the software package to best suit the or-
ganizations needs. Modification refers to changing of the code in the software in order
to make the system support processes that the out of the box package does not sup-
port. (Brehm, Heinzl and Markus 2001) Modifications are not very common nowadays
because of the high costs and the fact that they complicate the softwares updating.
Testing is done to ensure the compatibility between companys data and the ERP sys-
tems data handling routines. At the same time the usefulness and necessity of the
existing data is verified and only useful data are input into the ERP database. New pro-
cesses might also require creation of large quantities of data, such as price lists and
product catalogues. (Kouri and Vilpola 2006: 13-16)

Planning the deployment includes the determination of the user training, the schedule
of the deployment and the required activities. The challenge is to smoothly change
20

from the old systems to the new ERP without causing unreasonable harm to the com-
panys operations or to the employees. (Kouri and Vilpola 2006: 15)

User training has an effect on how quickly the employees can adopt the use of the new
system and therefore it affects how quickly the business objectives of the implementa-
tion project can be achieved. Training is expensive but the users need enough training
to understand the general idea behind the systems logic and its potential benefits as
well as the impact of their own activities on the big picture. (Kouri and Vilpola 2006:
15)

The deployment and tailoring of the system needs careful consideration regarding the
timing and method of the deployment. The deployment should not be done during the
busiest season and it can be done step by step, for example one function at a time.
When planning the deployment, the potential problems need to be prepared for and
alternative ways of carrying out the process need to be considered beforehand. Addi-
tional tailoring may still be needed at this stage, and it should be done in accordance
with users feedback and wishes. This step of the project requires careful attention
because the mistakes made at this stage can lead to a situation where the users are
not utilizing the system properly. (Kouri and Vilpola 2006: 15-16)

When the use is established and the system is being properly utilized in business, the
original business objectives of the project should be revised and the measurable objec-
tives should be measured. After this, the project can be finalized. (Kouri and Vilpola
2006: 16)

3.2 Risks in ERP Implementation Project

There are unique challenges and risks involved in ERP implementation projects.
Sumner (2005) lists four different categories of risks that pose a threat to successful
implementation project. These four risk categories are: technology, organization, peo-
ple and project size. The common risks associated with ERP projects are discussed in
this section in accordance with Sumners categories.

21

Technology risks vary according to how well the new system fits with the current cor-
porate technology infrastructure and operating system environment. When a company
implements a technology that is inconsistent with current operating system, database
and network environments, the system implementation will require fundamental
changes in technology infrastructure. Changing the technology infrastructure will raise
the technology risk and might lead to a situation where the companys internal tech-
nical expertise is inconsistent with the new infrastructure. To keep the technology risks
low, the technical requirements for the chosen ERP system should be consistent with
the companys technical know-how and the technology infrastructure. Despite the ef-
forts to mitigate these risks, technological bottlenecks often occur when implementing
a new ERP software package, especially when attempting to build bridges to legacy
applications. These issues pose risks to the project and can result in lack of integration.
Technological issues must be taken into account when selecting the ERP software
package in order to avoid unnecessary exposure to technology risks. (Sumner 2005:
116-118)

The organizational risks deal with companys business processes and organizational
factors (Sumner 2005: 116). When the features of the ERP software do not fit the
companys business requirements there are two possible strategies in implementing
the software. First option is to re-design the business processes to fit the software with
minimal tailoring and the second possibility is to modify the software to fit the process-
es. The first option should reduce errors and help to take advantage of newer versions
and updates of the system. On the other hand, changing business processes to fit the
system could mean changes in established ways of doing business, which can lead to
worker resistance and even to loss of competitive advantage as discussed in the ERP
disadvantages-section (see p15). The second option includes modification of the soft-
ware, which slows down the project and raises implementation costs, could affect the
stability of the system, and make managing future releases more difficult. On the other
hand, modifying the software implies less organizational changes. (Themistocleous
2005) For the success of ERP implementation project, in terms of project constraints,
the less modifying needed, the lower the risk of budget overrun and schedule delays.
The organizational risks also vary according to the amount of business processes that
the ERP implementation project affects. If the scope of the project affects nearly all
22

the companys business processes, the risk is greater than if it affects only 25% of the
processes, for example. (Sumner 2005: 116-118)

The third area of risk is associated with people resources. If the companys IT profes-
sionals are familiar with the application-specific ERP modules, then the probability of
successful implementation is enhanced. Insufficient training and re-skilling of the staff
and failure to efficiently mix internal and external expertise raise the risks of project
failure. People factors that affect the level of risk also include the know-how of the ERP
user staff and their involvement in the project. Inadequate training of end-users, inef-
fective project communications and lack of sensitivity to user resistance all lower the
chances of success. Risk of failure raises significantly, if the users are not fully commit-
ted to completing their activities in the implementation project. (Sumner 2005: 117-
118)

The fourth source of risk deals with project size. As an ERP implementation project can
be the largest single investment in corporate technology for many organizations, the
sheer size of the project poses considerable risk. Any project, that is as large and im-
portant as an ERP implementation project, needs senior management support, a prop-
er management control structure and effective communications in order to be success-
ful. (Sumner 2005: 117-118)

3.3 Controlling the Risks

Let us take a look at some strategies that companies can follow in order to mitigate
the risks involved in ERP implementation project. The risk mitigation strategies in this
section are categorized in the same four groups that Sumner lists in her book Enter-
prise Resource Planning (2005).

The technology risks can be controlled by selecting an ERP software that fits the tech-
nological infrastructure and technological expertise of the company in the best possible
way. Acquiring technical expertise through training, recruiting, or buying consultancy
or any combination of these activities, will lower the technological risk factors. Com-
mitment to using project management methodology and best practices specified by the
23

vendor as well as adherence with the specifications supported by the ERP software are
also important factors in controlling the risks. (Sumner 2005 : 118-119)

The organizational risk factors can be mitigated by committing to re-designing business
processes according to the best practices included in the ERP software. One of the
biggest benefits associated with ERPs is business process re-engineering that can be
gained by adopting best practices embedded in the ERP package. Many organizations
do not achieve this benefit because they rather modify the system in order to avoid
change. Planning the business process re-engineering carefully and implementing best
practices increases the chance of project success greatly. Careful process planning is
called for also in order to avoid changing the processes that can be identified as
sources of competitive advantage. Top managements commitment to restructuring
and following an enterprise wide design that supports data integration and new busi-
ness processes is crucial for mitigating organizational risks. Resistance to change is an
issue that needs to be dealt with by the companies implementing ERP. Employees
need to be well informed about the interrelationships that the ERP system creates and
the impact of their own actions on the big picture. An organizational culture that pro-
motes open communications is important to avoid resistance to change.(Sumner 2005:
119-120)

The risks associated with people resources can be lowered with effective recruiting and
retaining of skilled technical personnel and by efficient re-skilling and training of exist-
ing work force. Effective and appropriate use of consultants in the project is very im-
portant as well. Proper user training is critical to ERP success and organizations must
be willing to invest in training despite the high costs. User training should also focus on
business processes and not just on technical issues about how to use the software. If
the users are fully committed to their roles in the project, the possibilities of success
increase significantly. Effective communication strategies are important in mitigating
people factor risks as well as many other risks. (Sumner 2005: 118-121)

The fourth risk category that addresses project size can be mitigated by thorough pro-
ject planning and by assuring top managements support for the project. Establishing a
proper project management structure and clear roles for all the members involved in
the project, as well as properly planned schedule and budget help making the project
24

successful. Effective communications and contingency plans created for unexpected
issues are important for the success of ERP implementation. (Sumner 2005: 119-121)
25


4 The Enersize Case

This case study deals with the initial stages of Enersize Oys enterprise resource plan-
ning implementation project. The following sections of the text cover the details of
carrying out the case study, justification for acquiring an ERP system, the analysis of
Enersizes present state, the companys requirements for ERP, and the risk analysis of
the project.

4.1 Carrying Out the Case Study

A case study is both the process of learning about the case and the product of that
learning (Marschan-Piekkari and Welch 2004: 109). The aforementioned sentence rings
true in this case, since the researcher had plenty of issues to learn about the case
through research and products of that learning did not only contribute to the case
study but also contributed significantly to the project that is the subject of the study.
This is because the researcher was heavily involved in the project itself and therefore
in addition to the research done for the case study there were numerous practical
tasks related to the project that needed to be done. According to Handbook of Qualita-
tive Research Methods for International Business (Marschan-Piekkari and Welch 2004:
109) a case study is perhaps the most frequently used approach for thesis and disser-
tation research in business studies. In this case, as the researcher was working for the
project, it was a natural choice to research the ERP systems and ERP implementation
projects in general as concepts and this individual project as a unique case and com-
bine the findings in this thesis. Case studies require data collection through various
sources such as personal interviews, verbal reports, observation, and written reports.
As the subject of the study is a unique case, there is a need for sufficient information
to understand the unique features of the case as well as the characteristics that are
common to other similar cases. The research done for the theoretical part of the thesis
provided a strong understanding on the subject matter and thus also helped in the
case study research. (Marschan-Piekkari and Welch 2004: 109-110)

The actual implementation phase of an ERP implementation project is often led by the
vendor company and that is also the case with Enersizes ERP project. But as men-
26

tioned earlier, the whole implementation project is much larger from Enersizes point of
view than just the actual implementation phase and therefore the project must be
started already much before the vendor company is even chosen. The researcher was
responsible for planning and handling the practical tasks of the initial stages of the
project. Those tasks included planning the project, preparing the schedule, and organ-
izing and participating discussions, negotiations, meetings, and demo sessions with
ERP vendor companies as well as communicating the progress to the management of
Enersize who were responsible for making the decisions concerning the project.

The researchers role in the Enersizes ERP project served as a means to gather data
and gain understanding of the case. Observation was an important way to gather in-
formation and it was easy to observe the project, since the researcher was participat-
ing the meetings and discussions regarding the project. Verbal discussions and e-mail
correspondence between the researcher and both the case company employees and
the ERP vendors representatives provided in-depth understanding of the case. Being
involved in the project diminished the need for interviews and other ways of gathering
information compared to what would have been necessary for an outside researcher.
Nevertheless, in order to find out the problems of the present situation and the re-
quirements for the ERP system, many interviews and discussions with the workers of
Enersize were carried out.

4.2 ERP Implementation J ustification

Enersize is a new company with an aggressive growth strategy, which generates many
challenges for selection and implementation of a suitable ERP system. First of all, the
future operations are difficult to forecast accurately because the whole business con-
cept is new and Enersize, as a start-up, needs to be able to adapt to the market needs.
Secondly, the companys operations have not started on a large scale yet, so many of
the processes and procedures need to be planned and created without the possibility
of comparison with existing procedures. Thirdly, although Enersize is a small company
at the moment, the ERP system should be scalable and comprehensive enough so that
Enersizes operations will not outgrow the system in the near future. Also the fact, that
Enersize is a small start-up company, sets constraints for the ERP project in terms of
costs and scope.
27


Despite the above-mentioned challenges, implementing an ERP system at an early
stage can also be beneficial because many of the business procedures have yet to be
established and therefore the need for reengineering and changing working standards
is practically nonexistent, which decreases the employees resistance to change. An
early implementation also helps Enersize avoid the many problems related to changing
a familiar IT system and entrenched procedures. Another justification for an ERP pro-
ject in a new company, is the relatively small amount of employees that will make the
project cheaper and less time consuming. In most cases, there are less employees and
hence less ERP users in the beginning of the companys lifecycle compared to an im-
plementation at a more mature stage. Therefore the initial license and training costs
will be lower. Employees that are recruited later on, can be trained internally without
outside consultants.

The main objective of an ERP implementation project is to develop an organizations
business activities. Renewal of information systems alone is not enough for business
development but some level of change is needed for the procedures and processes.
(Kouri and Vilpola 2006: 11) The potential benefits of utilizing an ERP system, that
were introduced in the second chapter of this thesis, can all be used to justify the sub-
stantial effort and costs that goes into an ERP implementation project. However, all the
organizations that are considering ERP implementation need to deliberate their individ-
ual situation from a business point of view, weigh the benefits against the risk, and
carefully consider the timing of the project.

Prior to this implementation project, Enersize has no ERP system in use. Although
there is a system for file sharing and another system for sharing information informally
between employees, there is a real need for a software that can manage enterprise
wide information on a real time basis. By implementing an ERP at an early stage Ener-
size can take the advantage of optimizing the business processes and working stand-
ards from the beginning. Managing the whole supply chain is considerably easier with
an enterprise resource planning solution in use. Having the ERP system up and running
at the early stages enables employees to utilize uniform data in order to manage oper-
ations from the start and reduces the need for parallel spreadsheets and other diverse
ways for individuals to handle the daily business processes.
28


Enersize operates on an international scale from the beginning and aims to extend the
operations to a global level in the future. International business requires partner, sup-
plier and customer networks, that are very difficult to manage without an efficient in-
formation system. Global operations most often require subsidiaries, branch offices, or
strategic partners in geographically remote locations. As an ERP system creates and
maintains consistent data processing methods and an integrated database across dif-
ferent business divisions, it enables the company to uniform its procedures across dif-
ferent places of business and helps creating and preserving company culture (Murphy
and Wood 2011: 53).

Enersizes operations consist of customer projects, many of which remain open for
several years. These kinds of operations require quite complex project management
tools for monitoring and controlling budgets and allocating costs and workloads, for
example. In addition to the project management issues, Enersize needs to be able to
manage complicated purchasing activities with an international supplier network. ERP
systems are very efficient tools for managing complex operations like these and they
can also enhance financial management, which facilitates managerial decision making.
For all the reasons mentioned in this section, it is beneficial for Enersize to have an
ERP in use before the operations grow much larger in order to manage all the different
aspects of the business.

4.3 Analysis of the Present State

This section of the case study focuses on the problematic aspects and development
needs of Enersizes processes at present. The information needed for the analysis of
the present state of the company was derived from interviews and discussions with the
employees as well as through observation. By analyzing the present state, the areas of
business that need improvement could be identified and at the same time the require-
ments for the ERP solution could be further defined.

The situation at Enersize, at the moment of writing the thesis, is quite hectic because
there are many things to be taken care of in order to get the operations up and run-
ning as planned. As a new company, Enersize must put a lot of effort into research and
29

development as well as building recognition and obtaining financing, for example. Be-
fore the ERP implementation, Enersizes business is run mostly on a case by case basis,
meaning that most activities have not yet been formed into rationalized procedures. At
the moment there is only a small amount of projects that have already started and
therefore this approach has worked so far, but there is a need for systematization in
the near future. An ERP system provides good basis for rationalizing business process-
es. The activities that need to be supported by the ERP system include: sales process
and customer relationship management (CRM) functions, project management, finan-
cial management, and purchasing and other logistic activities.

4.3.1 Sales Process

The problem with the sales process at the moment is that there is too much time con-
suming manual work to be done in order to keep all the pieces of information together.
Because there is no common information system in place, the sales people must keep
their own records of customers, opportunities and prospects. On top of that, keeping
track of all the appointments and customer calls etc. takes plenty of time. Since there
is no common database, the information sharing is problematic and can become an
issue in case someone falls ill, for example. A customer relationship management
(CRM) tool, which most modern ERPs include, would facilitate the work of sales people
by organizing all the customer-related information and making it readily available for
all those concerned. An ERP system can also automate other repetitive tasks related to
the sales process and thus allow people to focus on the actual task of selling the ser-
vice. Figure 8 illustrates a simple outline of a sales process at Enersize at present. The
orange boxes in the figure represent actions that require manual work from Enersizes
workers.

30


Figure 8. The outline of Enersizes basic sales process at present.


4.3.2 Project Management

Project management is a major issue for Enersize, since the energy efficiency services
that the company sells are handled as customer projects. A proper project manage-
ment tool allows for easier control over the entire project. It enables the person in
charge to monitor and control the progress of the project, regardless of the amount of
people completing tasks for the project in question. All the components and services
that are purchased for a project must be allocated to the right project, as well as relat-
ed travel expenses and employees work hours. Allocating all incurred costs to the right
project is very important in order to find out the actual costs of the project. The actual
costs of projects are vital pieces of information for making decisions concerning future
projects. At the moment, the cost control is quite problematic because many employ-
ees do different tasks for different projects and there is no common system for work
hour entries in place. There are many aspects of project management that are de-
manding without a comprehensive project management tool. For example, tracking the
components that are purchased for a certain project and installed in the customers
premises and following their life cycles becomes problematic without a proper tool, as
more and more projects start.


31

4.3.3 Financial Management

Enersize has out sourced its accounting and bookkeeping to an outside agency. This
kind of arrangement is suitable for a small company, but the current system has prov-
en to be problematic even with relatively small amount of financial transactions that
Enersize needs to handle at present. The invoice circulation is not transparent, and
approval of purchase invoices requires too much work. Allocating the purchase invoices
to right projects is problematic and there is a lag before the financial transactions are
recorded. Also the handling of travel expenses is quite burdensome at the moment.
Because the bookkeeping is out sourced and handled in the agencys system, finding
out specific information about certain historical transactions requires work from an
employee of the agency, which is always charged by the hour and hence rather expen-
sive. Enersize is looking to automatize, simplify and clarify the invoice circulation and
the entire bookkeeping process with the new ERP system. The bookkeeping process
will take place in Enersizes own ERP system in the future, although the process will
still be handled by an outside bookkeeper. Figure 9 illustrates how the purchase in-
voice circulation is handled at the moment.

Figure 9. Enersizes purchase invoice circulation at present.

4.3.4 Logistics

There is a need for systematic approach to managing the logistic functions, such as
procurement, warehousing and transportation. The whole supply chain needs rationali-
32

zation and therefore an ERP system is called for, because it can considerably facilitate
supply chain management. At the moment the contracts with suppliers and transporta-
tion companies as well as the warehousing and assembly are not carried out in the
most efficient way. As an example, components are purchased from suppliers sepa-
rately for each project and shipped to Enersizes premises in Ulvila, Finland. After as-
sembly and packaging, the components are shipped from Ulvila to the customers loca-
tions by a transportation company with a one-off contract. Some of the components
have been purchased from Central Europe, shipped to Finland and then shipped again
to the final destination, which in some cases, is in China. It is clear that Enersizes
business calls for some level of geographic decentralization of logistics infrastructure.
For example, the components that will end up in China, should be, when feasible, pur-
chased, warehoused and assembled in China, in order to save transportation and cus-
toms costs. As mentioned earlier, not many customer projects have started yet and the
thought process and planning for rationalizing the supply chain is under way. The im-
plementation of an ERP system will provide the basis for efficient supply chain man-
agement.

4.3.5 Working Environment and Communication

The working environment of a company comprises both physical and social environ-
ments. Both aspects must be in balance in order to create a healthy and functional
working environment that accommodates the employees productivity and efficiency.
The working environment also affects the organizational communication and vise ver-
sa.

Enersize has two separate offices at the moment. The head office is located in Ulvila
and the other one in Helsinki. Both locations are open space offices with well-
functioning and modern furniture, office supplies, and IT infrastructure. There are
eleven workers in the main office and three in the Helsinki office at the time of writing
this thesis. Due to the small amount of employees, everyone in the company knows
each other and get on well. The atmosphere in the company is good and people are
committed to working for the organizational goals. As the company is new and has a
lot of potential, there is a general feeling of everyone pulling together to realize that
potential.
33


The communication within the company functions well, partly due to the small amount
of employees and to the physical proximity of the workers in the same office. Physical
proximity enhances the informal communication and relationships between employees
and at the same time supports the creation and preservation of company culture. The
open space office also facilitates the informal communication and social interaction
between the workers. The communication between the two offices is more problematic
and some issues of small importance might go unnoticed by the workers in the other
office. The organizational communication is enhanced by the companys intranet which
is called Enersize Wiki. This is a forum for informal reports and announcements which
enable workers to know what is going on with other employees individual tasks. Ener-
size Wiki is a useful communication tool, since individuals are often engaged with their
own tasks and sometimes others are not fully aware of what is going on elsewhere in
the organization.

While organizational communication works well at the moment, there are aspects to it
that can be enhanced with the introduction of the new ERP system. And communica-
tion will become more problematic as the company grows and more employees are
recruited and new office locations opened. At the moment an ERP system could facili-
tate the communication related to projects and other business processes. It could elim-
inate or at least reduce the need for spreadsheets and other individual ways of manag-
ing business related information. Managing the information takes considerable amount
of employees time and effort and creates problems in sharing of that information. The
difficulties in information sharing can be harmful for the company in case of sickness or
holidays etc.

4.4 Risk Analysis of Enersizes ERP Project

Enterprise resource planning implementation is a significant investment and therefore
the risks of the project should be analyzed. ERP implementation projects differ from
typical production investments because it is not possible to make comprehensive in-
vestment calculations on ERP projects. An ERP implementation project is often classi-
fied as a strategic investment and the success of the project is not typically measured
in monetary terms, but by comparing the goals and objectives of the project with the
34

actual outcome. Although information system implementations are costly investments,
it is very difficult to define the profits these investments generate. (Kouri and Vilpola
2006: 70)

The purpose of the following risk analysis is to prepare for the realization of risks, miti-
gate the risks, and possibly prevent some of the risks altogether. The risks were identi-
fied by discussing with the personnel and analyzing the current situation at Enersize
and by predicting the potential problems that can arise during the project. The most
prominent risks were derived from the analysis of the present state as well as from
relevant literature and case studies of other companies ERP implementations. This risk
analysis is conducted before the actual implementation and there might be risks that
emerge at later stages of the project. Therefore the risk analysis should be an ongoing
process and all relevant risks need to be revised as the project proceeds. In this analy-
sis the risks are divided into three categories according to which phase of the project
they affect. The categories are:
- risks of ERP system selection,
- risks of ERP implementation,
- and risks of ERP usage.

4.4.1 Risks of ERP System Selection

There is a need for careful consideration before making the decision on which ERP
system to implement. If the risks that appear in this phase of the project realize, they
can create serious problems at later stages or even lead to failure of the entire project.
(Kouri and Vilpola 2006: 76) The biggest risks concerning Enersizes ERP system selec-
tion are illustrated in the risk matrix in figure 10. The risks associated with the selec-
tion are situated in the matrix according to their probability and impact, so that the
most severe risks are at the top right corner.

35


Figure 10. Risk matrix of ERP system selection.


The risk of selecting an unsuitable ERP system is very real for Enersize. As the compa-
ny is at its early stages, there is no ERP system currently in use which is a good thing
from change managements point of view, but it also means that there is nothing to
compare the new system to. The operations of Enersize have yet to start on a full
scale, and therefore it is quite complicated to know exactly what kind of a system
would be the most suitable one for the company. The ERP software can be unsuitable
for various different reasons and therefore it is very important to pay careful attention
to the companys processes and needs and to the features of the software.

The decision concerning ERP system selection must be based on what is known at the
moment and what can be predicted about the future. As Enersize is at its early stages,
some aspects of the future operations are difficult to forecast and therefore the risk of
36

mispredicting some ERP needs is rather high. The impact of this risk depends on what
kind of need was failed to predict, but in worst case scenario, the use of the whole
system might be jeopardized. Even if the predictions prove to be correct, there are
many processes that might need changing as the company grows and develops. Some
changes can be posed by customers, some by competition and some by changes in
political or economical environment, for example. As discussed before, Enersize plans
to expand its operations on a global level. Therefore Enersizes ERP system needs to
have good possibilities for international business activities and readiness for various
localizations. The system must be versatile and comprehensive enough for complex
international business operations, even though Enersizes ERP needs are much simpler
and less demanding at the moment of implementation. All the things mentioned above,
demand very careful consideration and planning, in order to mitigate these risks. It
would be quite simple to select an ERP software that could support Enersizes current
activities but the whole project will be deemed a failure, if the same ERP cannot be
utilized five years from now.

The vendor of the ERP system plays an important role in the implementation project.
The vendor company is partly responsible for managing the whole project and they
provide training and other consultation. Enersize is looking for a vendor that can also
provide the server maintenance and support services, so that Enersizes own IT per-
sonnel can concentrate on the development of Enersizes proprietary software Enersize
Cloud. Although this confines the group of potential vendors a little, there are many
ERP providers who offer server maintenance and related services. It is important for
Enersize to evaluate and compare different vendors before choosing one. The vendor
companys experience, references, and financial state are factors that affect the selec-
tion. One very important issue is vendors attitude towards their possible customer and
their willingness to take part in the demanding project. The risk of choosing a wrong
vendor can be lowered by thorough search of available information on the possible
vendors and by meeting their representatives and discussing with their project manag-
ers beforehand. After the selection, establishing good communications with the vendor
company is essential in order to avoid misunderstandings and other unnecessary prob-
lems.

37

The technological infrastructure and operating system environment seems to be a
problematic issue. Enersize uses Mac computers with Mac OS operating systems while
most of the ERP systems available on the market are Windows-based and therefore
not compatible with Mac computers. ERPs that are fully web-based, i.e. can be used
through a web browser, are independent of the operating system. Although it seems
that web-based ERP software are gaining popularity, it has proven to be difficult to find
a web-based solution that would suit Enersizes needs. Windows-based software can
be used on Mac computers through a virtual desktop solution, but it raises the risk of
complications related to technological compatibility. In Enersizes case, this risk must
be taken into consideration before deciding on which system to implement. The risk
can be mitigated by testing the solutions beforehand and evaluating their usability and
suitability for the companys needs.

Insufficient participation from different organizational divisions and lack of know-how
for contract making are also featured in the risk matrix of figure 10. Due to a hectic
phase in Enersizes life cycle, all the employees are quite busy with their daily tasks.
This means that some people may not be able to contribute enough time to the ERP
project. Therefore there is a risk that some organizational divisions interests do not
transpire when selecting the ERP software. The amount of employees is small and all
the organizational divisions are still working closely together so the mitigation of this
risk is not very complicated. It needs to be made sure that the communication within
the company is efficient and that all organizational divisions are included in this phase
of the project. The details of the contract itself are very important, especially if big
problems arise during the implementation project. The contract must be carefully ex-
amined before signing and all the necessary particulars need to be included. I f it
seems like there is not enough know-how for contract making within the company,
external consulting should be used.

4.4.2 Risks of ERP I mplementation

The risk matrix in figure 11 illustrates the most prominent risks associated with the
actual implementation phase of Enersizes ERP implementation project. According to
Kouri and Vilpola (2006), the most significant risks of this phase are associated with
change management and with the role of employees in the change process. While
38

change management is important in Enersizes case, it is not the biggest concern, since
there are no old familiar procedures in place before the implementation. Employees
commitment to the implementation project and to the use of the new system, are vital
to the success of the whole undertaking.


Figure 11. Risk matrix of ERP implementation.


As mentioned earlier, this phase of Enersizes life cycle is hectic and the possibility of
unforeseen events is relatively high. Therefore some employees can have difficulties in
finding enough time for participating in the implementation project. Employees com-
mitment to the project is extremely important for the success of the project and even
though the project will disturb the workers daily activities on some level, it should be
planned and managed so that everyone involved has time to participate. Being able to
commit to the project and running the daily business at the same time depend greatly
on the project planning, communication and project management. All the project par-
39

ticipants need to be informed about their tasks and responsibilities well in advance.
The extra effort needed from employees during the implementation needs to be justi-
fied and explained so that they understand the necessity of their contribution.

There is a risk that the system will not work in practice as anticipated. The integration
with other systems (such as e-mail and calendar, for example) might also be problem-
atic, especially if the chosen ERP software is based on a different operating system
than the companys computers. These are risks that need to be conversed on with the
vendor before the implementation and must be kept in mind when defining the com-
panys processes. Adequate testing of the system in demo environment decreases the
chance of unexpected problems regarding the use in practice.

The relationship between the vendor and the customer is essential for the success of
the project. A company that is implementing an ERP system must be a critical and de-
manding customer in order to make sure the vendor carries out their part in a success-
ful project. (Kouri and Vilpola 2006: 78-79) The whole project will turn out to be prob-
lematic if the vendor is not fully committed to it. This issue needs to be borne in mind
already when selecting a vendor and when making the contract. The vendors lack of
commitment can also reflect to the training of the employees, which can be insufficient
or of poor quality. Inadequate training will undoubtedly lead to problems in the use of
the ERP. A common reason for inadequate training, which has nothing to do with the
vendors commitment, is companies will to reduce the cost of the project by cutting
down on training. Although training is expensive, it is a wise investment, because the
problems that lack of training can create at later stages, can end up costing far more.
Thorough project planning and communication with the employees are key factors in
finding appropriate level for training.

The biggest issue concerning change management in Enersizes ERP project is the em-
ployees willingness to commit to the new procedures. Even though there will be no
change from any particular old system to the new one, the processes and procedures
of the new ERP need to be adopted. There are tasks related to the use of the system
that need to be turned into routines, such as work hour entries for example. Without
timely input of correct information, the system will not contain up-to-date data and
consequently produces false information for decision making. Some of these tasks
40

might seem unimportant if the actual purpose is not clearly explained. All the benefits
of the system and the necessity of their contribution must be made clear to the users.
Effective communication strategy and comprehensive information sharing are ways to
facilitate employees commitment to the new procedures.

Schedule and budget overruns are very common in ERP projects. Comprehensive pro-
ject planning and effective project management are ways to mitigate the risk of ex-
ceeding these project constraints. An important thing is to plan the schedule so that it
is tight enough but realistic. A tight schedule enables good pace for user training and
allows for project managers full commitment to the project. But the daily business of
the company must be taken care of at the same time, so the schedule cannot be too
hectic.

4.4.3 Risks of ERP Usage

There are several risks affecting the use of ERP systems. I t is important to assess the-
se risks already at the beginning of the implementation process, because many risks
regarding the usage can be mitigated and prepared for already at earlier stages. As
Enersize has not used ERP before, it is difficult to forecast the potential problems that
might arise, but by paying attention to common problems related to ERP usage, Ener-
size can avoid some of the typical pitfalls. The risk matrix in the figure 12 shows the
most prominent risks related to ERP usage in Enersizes case.
41


Figure 12. Risk matrix of ERP usage.


The benefits of the ERP will not realize unless the system is utilized properly. It is im-
portant to plan the processes that the system supports, so that all the potential busi-
ness benefits can be obtained. All relevant information must be included in the system
for making the data, that is produced by the system, accurate and reliable for decision
making purposes. In order to get the full advantage out of the system, it requires peo-
ple to use the system as it is designed to be used. Therefore user training needs to be
conducted in a way that all the users are provided with necessary know-how for com-
prehensive use. The risk of inadequate use of the ERP can be controlled by preparing
the users for their responsibilities regarding the system and by aligning the business
processes and the ERP system to meet the business objectives. Ensuring the proper
use of the system will also reduce the risk that workers will have other ways of doing
their work outside the system.

42

System updates can prove to be problematic if there are several integrations with oth-
er programs or if the system is heavily modified. Because Enersize can start the ERP
implementation from a clean slate, there is an opportunity to design the processes to
fit the selected system so that there is no need for massive tailoring. Enersize is also
looking for a comprehensive system that will not need to be integrated with many oth-
er systems. Less tailoring and integrations also means less money spent on consulting.
The system should still be quite easily modifiable due to the fact that many aspects of
Enersizes future operations are quite difficult to predict. The aforementioned risks can
arise after the implementation, but it is important to consider them already at the be-
ginning of the project.

As mentioned earlier, the true benefits of the ERP system are quite difficult to calculate
and might not be easy to notice. Therefore there is a risk that the system does not
seem to be beneficial for business. I f the system seems ineffectual, even if in reality it
is not, its use will most likely suffer and that will eventually lead to redundancy of the
system. To prevent this from happening, the business objectives of the ERP implemen-
tation should be clearly defined and their fulfillment monitored and evaluated as the
system is in use. For Enersize it is difficult to set a point of reference because there is
no old system to compare the new one to. Therefore the success of the ERP system
must be measured by evaluating the accomplishment of the business objectives, in-
stead of evaluating the system by itself. But this should not be a problematic issue,
since the purpose of implementing an ERP is business development. The important
thing for Enersize is to set clear business goals and utilize the ERP system in the best
possible way to achieve those goals.

It is essential to consider the problems that will be caused if the development of the
system stops or if the vendor stops supporting the system. A backup plan for a situa-
tion where the vendor must be changed should be in place and the possibilities of con-
tinuing the use of a system that is no longer developed should be considered. To pre-
vent these problems, the background of the ERP system itself as well as the back-
ground of the vendor must be carefully studied before selecting the system.

The risk of not inputting all the necessary data into the system at the initial stage is
quite low for Enersize due to relatively small amount of data. It is very important to
43

keep this risk in mind while the system is in use, because the system cannot provide
reliable information if the necessary data is not entered into the system. The reporting
abilities of the system also need to be carefully examined before deciding on which
software to implement. In Enersizes case for example, the project management tools
are very important because of the nature of the business. Therefore the reporting on
projects must be versatile and precise, because the decisions on future projects are
made according to the reports on former projects.

4.5 Requirements for the ERP System

There are a number of important issues that need to be taken into consideration when
selecting an ERP solution for a company. An organizations operations, business pro-
cesses, procedures, communication structure, goals, IT infrastructure, and resources
must be closely examined before the criteria and the requirements for the ERP can be
defined. After analyzing the present state of the company and its projected future
needs and objectives, the requirements for Enersizes ERP system were defined.

4.5.1 General Requirements

The very basic requirement for Enersizes ERP system is that modules for all the busi-
ness functions that are needed in Enersizes operations are included in the software.
Enersize needs a comprehensive system that comprises a wide variety of ERP func-
tionalities, even though the amount of data, that the system needs to handle, is rela-
tively small at the moment. The functionalities that must be supported by the ERP
include:
- sales management,
- customer relationship management,
- project management,
- financial management,
- logistics management (purchasing, inventory, distribution) and,
- reporting tools.
Despite the fact that Enersize needs their ERP solution to cover many different busi-
ness functions, the system should be as light, simple, and easy to use as possible.

44

The cost of the system and its implementation are prominent factors in the ERP selec-
tion. It is important to consider and specify the amount that the company is willing to
invest into the system and then attempt to carry out the project within the budget.
Although cost effectiveness is a major issue for Enersize, as for any company, the price
is not the most important factor affecting the decisions concerning ERP implementa-
tion. Enersize seeks to acquire the most optimal system for the companys needs, in-
stead of just an inexpensive one. It is vital for the success of the implementation to
obtain appropriate amount of consultancy and training, although they are expensive.
The money saved in the wrong areas at this point, might later end up costing much
more.

The selection of the ERP vendor is a vital decision and therefore it is important to con-
sider what kind of contribution is expected and required from the vendor company. It
is difficult to define exact requirements for the vendor, but the following are some
qualities, that are deemed important by Enersize. The vendor must show good attitude
and real interest towards Enersizes ERP implementation and be ready to commit to the
undertaking. They must have plenty of experience in ERP implementations and good
references. The vendor should also be economically stable and committed to continue
supporting the chosen ERP solution. Enersize is looking for a vendor that can provide
server hosting and all the maintenance for the system. Enersizes IT staff is concentrat-
ing on developing and maintaining the companys proprietary software and therefore is
not willing to be responsible for server maintenance. Enersize is also reluctant to invest
in any additional hardware, so the server hosting should be outsourced.

The ERP system should fit the IT-infrastructure of the company in order to avoid com-
patibility problems. This is a challenging issue for Enersize where all the computers run
Mac operating systems. There are not many comprehensive ERP solutions available on
Mac OS, since most are designed for Windows environment. The Windows-based ERPs
can be used on Mac computers through a virtual desktop program and web-based ERP
solutions are usable on all operating systems. Enersize must find the best possible
compatibility between the solution and the companys IT infrastructure. Enersize is not
considering changing the IT-environment of the company and therefore the system is
required to be usable with Mac computers.

45

The systems ability to provide versatile and detailed reports is extremely important for
management purposes. Management needs to base their decisions on reliable and up-
to-date information and most modern ERP systems are equipped with comprehensive
tools for report creation. Enersize is looking for the ERP system to enhance access to
information by good reporting abilities. In addition to decision making, reports can help
controlling costs and work hours, for example. Good reporting tools mitigate the need
for searching specific information from the database and automated reports facilitate
managing several aspects of the business.

4.5.2 Users, Locations, and Integrations

At the time of implementation there will be only ten users of Enersizes ERP solution
and only two locations where the system will be used. These locations are Enersizes
offices in Finland which are in Ulvila and Helsinki. There are no needs to integrate the
new ERP system with any existing business software because there are currently no
business software in use at Enersize and the idea is to implement a comprehensive
ERP solution that eliminates the need to use other systems alongside the ERP. Enersize
Cloud is the proprietary software of Enersize that contains data on customer projects,
some of which is relevant to the ERP system. In the future the need to integrate the
ERP with the Enersize Cloud might emerge but at the moment it is decided that the
software will be kept independent from the ERP. In the beginning there is also no need
to link the system with any partners or suppliers systems.

The ERP system must be linked to the e-mail and calendar or these tools must be inte-
grated in the system, in order to make the communication as effective as possible and
to avoid unnecessary duplicate entering and maintaining of information. E-mail is
probably the most important means of communication for business people today and it
is crucial that calendar system, contact lists, and task lists are closely linked with e-mail
and that all these systems communicate seamlessly with the ERP system. It will de-
pend on the chosen ERP solution whether Enersizes current e-mail and calendar sys-
tems will be linked to the new ERP or if Enersize will change to some other e-mail sys-
tem that is already integrated in the ERP.

46

The paragraph above points out that there will not be many users, no need for integra-
tions, and the amount of data that the system needs to handle is relatively small. All of
this is true in the beginning but, as brought up before, Enersizes operations are pro-
jected to grow substantially in the forthcoming years. Therefore scalability is a very
important quality in Enersizes ERP system. Scalability of the ERP system refers to the
systems ability to handle growing amount of transactions or its ability to be enlarged
according to growing needs. As Enersizes operations grow, the ERP must be capable
of handling more users, more locations, and larger amount of data. The possible need
for integrations with other software and linkages with some interest groups systems
that might emerge in the future must be considered when choosing the ERP solution.
The current enterprise resource planning needs of Enersize could be met with relatively
simple and light solution but the challenge is to find a system that will be efficient even
when operating on a much larger scale than Enersize is currently operating.

Internationality is another crucial criterion for Enersizes ERP software. The company is
operating internationally already at the time of ERP implementation and the goal is to
expand the operations to various new countries in the future. Therefore it is vital that
the ERP system supports multi-lingual and multi-currency features and that localiza-
tions to various countries are possible. In the beginning the ERP system will be used at
only two locations but the system must be efficient and practical even in the situation
where Enersize will have branch offices, subsidiaries, or partners in several locations
around the globe.

The above-mentioned requirements of internationality and scalability are essential in
ensuring the feasibility of the system in the future and thus preventing the situation
where the ERP needs to be changed in the next few years due to its inability to ac-
commodate the growth of the companys operations.

4.5.3 Process Requirements

Enersize is looking to implement a comprehensive ERP solution, which means that it
must support all the business processes that are fundamental for the companys opera-
tions. The most important processes for Enersize include the sales process, processes
related to the projects, financial management processes, and logistic processes.
47


The sales process is essential in most companies operations because most companies
generate profits through sales of products or services. The sales related information
handling should be as automated as possible and readily available for controlling and
decision making purposes. Customer relationship management tool is a necessary part
of the ERP system that supports the sales activities by organizing the information
about potential, existing, and former customers.

As mentioned in the analysis of the present state, the sales related activities and cus-
tomer relationship management require too much manual work at the moment. The
information concerning customers is not readily and easily available for all the employ-
ees when needed. Modern ERP systems have tools for automating unnecessary manual
tasks that Enersizes sales personnel must currently carry out and the ERP unifies the
information by utilizing a single database. Figure 13 illustrates the simplified outline of
a sales process after the implementation of an ERP system. The orange boxes in the
picture represent the manual work that Enersizes sales staff must do and the yellow
boxes illustrate the tasks that ERP system supports and partially or fully automates.
After the phases illustrated in the figure, the system continues to create the bill of ma-
terials, picking lists and/or purchase orders according to the order and finally generates
an invoice to the customer.


Figure 13. The sales process after ERP implementation.


48

Project management module is a very important tool for Enersize since the core busi-
ness is conducted in form of customer projects. Enersize sells energy efficiency ser-
vices that are carried out as projects. Therefore the project tool must be versatile and
efficient. Enersizes projects can be relatively complex and long lasting and the system
must be able to facilitate the project management and provide useful reports and in-
formation concerning the projects.

As a project is a unique and temporary undertaking that is planned and carried out to
achieve a certain outcome, it differs from a process that can be repeated and per-
formed in the same way each time. Although each project is different there are several
processes within a project that can be carried out similarly in different projects. The
main purpose of the ERPs project management tool is to facilitate the controlling and
monitoring of the projects progression and costs. It is also important that all the hours
worked for the project can be registered and all the incurred invoices can easily be
allocated to the right project. In Enersizes case, some customer projects can go on for
long periods of time after the installation is done. Therefore the systems ability to
monitor the installed items, track and record customer requests, and create and send
repetitive invoices, is important. Figure 14 illustrates an example of the outline of Ener-
sizes customer project in the ERP system.


49


Figure 14. Outline of a customer project in ERP systems project management tool.


The financial management is at the core of every business and that is also the case
with Enersize. Financial management tool of the ERP system is an important part of
Enersizes future ERP solution and it will contribute to the overall efficiency and
productivity of the company. Easy access to real time financial information enhances
decision making and control and the access to that information can be improved by
managing the financials in the companys own information system. Many modern ERP
systems financial modules have support for budgeting, bank reconciliation, and multi-
ple currencies. They create automatic journal entries from transactions and the alloca-
tion of these transactions to a project or a profit center can be automated.

Currently the financial management in Enersize is outsourced and the access to histori-
cal financial information is not on optimal level. There is a lag before the transactions
are recorded and allocation of some of the transactions to the right project is problem-
atic. The invoice circulation is not satisfactory with the current system and that is one
50

of the most prominent problems at the moment. Figure 15 shows a simplified outline
of the purchase invoice circulation as it is desired to be handled in the ERP system.



Figure 15. Purchase invoice circulation with ERP system.


Logistics management is an important factor in Enersizes operations even though En-
ersize is not a manufacturing company. The energy saving services that Enersize sells
require hardware that need to be purchased, stored, and transported to the customers
premises. All these activities must be planned and turned into efficient logistic process-
es that will form the basis of the logistic operations.

The ERP system must be able to support purchase activities by arranging the supplier
information and by automating the purchase order creation and related invoicing. The
same applies to the transportation activities. The information concerning inventories
and warehouse activities must be automated, kept up to date and made readily availa-
ble. Enersize looks to optimize the supply chain management with the ERP system by
creating processes that form the frame for the whole supply chain. ERP system has a
major role in controlling the information flows related to the supply chain and in auto-
mating several tasks that currently need to be done manually.


51

4.6 ERP System proposition

One of the goals of the thesis was to propose a suitable ERP solution for Enersize to
implement. There is a considerable amount of different ERP systems on the market
and the companys needs and objectives must be clear in order to distinguish the most
optimal solution from the mass. Thorough research was required before the options
could be narrowed down to only include the feasible solutions for Enersizes needs.
The final selection of the system is a major decision and therefore it is done by the top
management of the company. The Tentative discussions with vendors and demo ses-
sions were participated by project manager, IT manager, and the management assis-
tant of Enersize in addition to the researcher, in order to include different perspectives
and to take all the necessary aspects of the companys ERP requirements into consid-
eration.

The ERP systems that were closely examined include SAP Business One, LeanSystem,
Epicor, J eeves, Visma, Lemonsoft, OpenERP, Pupesoft, and Compiere. OpenERP,
Pupesoft, and Compiere differ from the other six as they are all open-source ERPs.
There are no license costs involved in Open-source software and for this reason they
are often less expensive to implement. All the aforementioned nine ERP solutions were
selected for closer examination after preliminary research of a large number of sys-
tems. These solutions were thoroughly researched and compared with Enersizes ERP
requirements in mind. Table one shows general level comparison between the nine
ERP systems. All the systems were evaluated according to general qualities that are
important from Enersizes point of view. Each quality was graded with one to three
plus or minus points (see table 1).

52


Table 1. ERP system comparison.

After several discussions with vendors and many demo sessions, the most prominent
solution for Enersizes needs proved to be SAP Business One, which is SAPs ERP sys-
tem that is developed for small and medium sized businesses. SAP Business One meets
the criteria that Enersize has for the ERP system. It is comprehensive and yet afforda-
ble ERP solution which is suitable for international operations. SAP Business One is
supported by vendors all over the world. It is a robust ERP that can handle the future
ERP needs of Enersize without being too expensive to implement. The proposed ERP
solution for Enersize includes MARI Projekt which is a project management tool created
by Maringo Computers. MARI Projekt is an add-on for SAP Business One for service
providers. The project management tool in SAP Business One itself is not comprehen-
sive enough for a service company that conducts its business in form of customer pro-
jects, such as Enersize. With the MARI project management tool SAP Business One
includes all the functionalities that are necessary for managing Enersizes business. The
system is very versatile and the user interface is clear and logical. SAP Business One is
a system that fills the requirements that Enersize has for the ERP without need for
extensive tailoring.

As mentioned previously, the I T-infrastructure of Enersize set constraints to the selec-
tion because there are not many ERP systems on the market that are compatible with
Mac operating system. However, many vendors offer web-based solutions that are
usable on all operating systems but none of the web-based ERPs proved to be suitable
53

for Enersizes needs after closer examination. They were all either missing a crucial
functionality or they were not comprehensive enough for handling Enersizes future
ERP needs. Therefore the most feasible solution for Enersize is to use SAP Business
One, which is a comprehensive windows-based ERP, through a virtual desktop system.
54


5 Conclusions

It is clear that many modern companies need access to accurate real-time information
as well as support and automatization for their business processes in order to keep up
with the competition. Enterprise resource planning systems can provide access to such
information and automate the business processes along with other benefits. ERP sys-
tems are not problem-free but instead are often associated with problematic imple-
mentations and high costs. Despite the problems, ERP systems are widely used and
deemed beneficial.

An ERP implementation is a major investment for any organization, large or small. Un-
dertaking the project requires careful planning, management, and participation from all
organizational divisions as well as support from the top management. The goals of the
project should always be business-related since an ERP implementation is a business
development project.

In the beginning, business software were targeted to large manufacturing organiza-
tions but today there are systems for the needs of all kinds of companies available on
the market, regardless of size or business sector. ERP vendors have recently started
focusing more on serving the needs of the small and medium sized companies by of-
fering more affordable and less complex solutions. ERP systems are developing as
technology advances and new ERP needs emerge. The modern trend seems to be that
ERP solutions are offered to companies on a software as a service (SaaS) basis. SaaS
solutions eliminate the need for software installations and hardware maintenance and
thus allow for concentration on core competencies.

The purpose of the theoretical part of this thesis was to provide insight into the history
and function of ERP systems. The research for this part was conducted by going
through various literature sources. This subject has previously been widely researched
and covered in literature but there is room for further research since the enterprise
resource planning is developing as a concept as new features are added to the sys-
tems and new ways of delivering the software are emerging.

55

The case study aimed to help Enersize with the initial stages in the ERP implementa-
tion project, i.e. to define the companys ERP requirements and needs and to find a
suitable ERP solution for Enersize to implement.

Assessing the business processes to be supported by the ERP system required thor-
ough evaluation of Enersizes current state and future business goals as well as the
risks affecting the ERP implementation. The evaluation made the definition of ERP re-
quirements possible and formed the criteria for Enersizes ERP solution. After compre-
hensive research the proposed solution was SAP Business One with MARI Projekt-
project management add-on, which was accepted by Enersizes management to be the
ERP system that the company will implement.

Participation and help from the employees and management of Enersize was required
at many stages during the completion of the case study. An ERP implementation is a
major investment and the consequences of certain decisions concerning the project are
far reaching and therefore must be made by the companys management with careful
consideration
56


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Appendix 1
1 (2)

Frame for I nterviews

Information about interviewee

Position in the company:


Description of daily tasks:


Problematic areas of daily tasks:


Do you think that ERP would be beneficial in your work?


Have you used ERP before? Which system? Opinions about the use?



Information about ERP requirements

How could ERP facilitate your work?


What kind of ERP functions and features would you need in your work?


Which tasks require unnecessary manual work?


How well is internal communication and information sharing working?
What are the problematic areas?
How would you solve these problems?


How well is external communication (with partners, customers, suppli
ers...)working?
What are the problematic areas?
How would you solve these problems?


Information about opinions on implementation

Do you think that Enersize needs an ERP system?


Do you think your daily work would be hampered during the ERP imple-
mentation?


Appendix 1
2 (2)

Would you be ready for the extra effort needed during the implementa
tion?


When would be the best time for ERP implementation in your opinion?


What is your opinion on the changes that the system will bring?

Appendix 2
1 (1)


Timetable for the ERP I mplementation Project